The difference in the rental price between Housing Board condos and flats has decreased significantly. HDB rental rates have remained constant and even increased in the same period, while private unit rents fell for more than 6 months. This has led both housing types to perform differently on the market.

If these trends continue, it may become more desirable to rent a private house than an HDB apartment, especially for tenants who are willing trade off space for the additional privacy offered by a private residence.

Tenants are likely to change their priorities and choices soon. Landlords should be aware of the changes in the marketplace and adjust their strategies to suit. This can help mitigate the risks of prolonged vacancy.

Private rental prices have dropped rapidly. As a result, more landlords are willing to lower their rents rather than leave their properties vacant. In contrast, two years earlier, homes were leased in just a matter of a week after a unit received over 20 viewings. The time it takes to rent a property can now be anywhere between two and three weeks. Some properties, especially older or less well maintained units, remain vacant for as long as six months.

The supply of homes has increased, and rents have decreased as a result. In 2022/2023 alone, over 29,000 new private homes will be completed. In addition, a sharp decrease in demand for local properties exacerbated this situation. After moving into their newly purchased homes, many locals abandoned the leasing markets. As a result of the drop in expatriate interest, the market is facing more challenges.

After peaking during the third quarter in 2023, the monthly median rental prices for condos have been in a downward spiral. From $4,550, they dropped to $4.500, then $4.300, in the last two months of the year 2024.

The prime core central area (CCR) saw the steepest drop in condo rents, which was 5.6% in just two months from the end of the third quarter in 2023. Next, the suburbs or the outside of the Central Region (OCR) at 5% and the city edge, or the rest of the Central Region (RCR), 3%, were recorded.

Some districts experienced a more dramatic drop in median rents for condos. District 5 saw a dramatic drop of 10.9 percent from $4.600 per month in the third of 2023 down to $4.100 per month from January through February 2024. The median rent for District 13 Macpherson (Braddell) dropped by 9.1 percentage points, while that of District 18 Tampines (Pasir Ris), as well as District 4 Telok Blangah (Harbourfront) fell by 7.7 percentage points.

District 10 in the prime segment (Ardmore Bukit Tin, Holland Road Tanglin, Bukit Tamah) recorded the biggest drop, of 6.9 %, from $ 6,900 to,425, within the same time frame.

HDB’s rental market is showing a distinct trend from the private rental market. According to SRX99.co’s instant estimates, HDB flat rental prices will continue to rise and reach a new high in 2024.

Median rentals for three room flats have seen the largest increase with a 12 percent jump in 2024 as compared to the previous year. HDB rental data showed that there was a similar rental increase of 10 percent for four room flats.

A total of 43 HDB apartment units have been rented to date at a minimum monthly rent of $6,000, with two units renting for more than $7,000. In November of 2023, Tanjong Pagar Plaza’s five-room flat commanded a monthly rent of $7600. In September, 2023, a Geylang five-room house located in Pine Close rented out for $7400 monthly.

These findings show that the HDB Rental Market is growing steadily. In some places, rents have even reached new record highs. It is partly because of the strong demand for HDB homes and the limited supply. HDB flats remain more affordable compared to private homes whose prices have increased because of inflationary forces and increased taxes.

A smaller number of HDB units have been able to meet the five-year minimum period of occupation (MOP). This has led to fewer HDB units being available for renting. MOP-flats were reduced from 30,920 to 15,549 between 2022 and 2023.

The rental gap between HDB units and condos continues to narrow. It is possible that more tenants will return to condos.

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Even though the average rents rose, the number flats leased in higher price ranges has decreased since 2024. This suggests that HDB flats have become less desirable to tenants, who are now looking for alternatives in the market.

For example 157 flats with a monthly rental of at lease $4,500 were leased by the first two months in 2023. By contrast, only 114 apartments were leased over the same period in 2020. The number of apartments leased for more than $5,000 per month dropped from 60 down to 21 in the same time frame.

Rents for HDB flats are now comparable to condos. In the 3rd quarter of 2023 median monthly rents for HDB and private homes were around $3,100. In 2024’s first two-month period, the gap between HDB apartments and private homes has narrowed down to $1,200.

As rents are becoming more competitive, some tenants could opt to downsize from large flats into two- or even three-bedroom apartments in suburbs. Based on transactions for the first half of 2024 (around $3,600), the median monthly rent in the suburbs for a condo with two bedrooms was similar to that for executive apartments or flats with five rooms, which are around $3.500 to $3.600.

These units are located in District 26 (Upper Thomson, Springleaf), District 17 (Loyang, Changi), and District 28 (Seletar). The units can be located in the following districts: District 26 (Upper Thomson), district 17 (Loyang), district 28 (Seletar), district 23 (Hillview Dairy Farm Bukit Pandan, Chua Chu Kang), and even District 27 Yishun Sembawang.

As the price gap between HDB rental and private rents narrows in Singapore, there may be a shift of tenant behavior. Some tenants could return to HDB, whereas others may relocate from the fringes of the cities to prime locations.

HDB rentals may come under pressure because of the upcoming market competition. However, there is no need to worry about a price increase, as the supply of units in MOP will only be 11,952 at year’s end.

The relaxation of the occupancy limits for these flats, which allows up eight unrelated individuals in one unit, is expected keep the demand for bigger flats strong.